We
study empirical determinants and effects of firms' participation in the
EPA's 33/50 voluntary pollution reduction program. We broaden the existing
literature in three principal ways, studying (1) bi-directional links
between participation in the 33/50 program and regulatory enforcement,
(2) effects of implicit boycott threats, and (3) potential impacts of
regulatory preemption incentives. We find evidence that firms' participation
in the 33/50 program was motivated by the expectation of relaxed regulatory
scrutiny, an expectation that was borne out by regulatory practice. 33/50
program participation and pollutant reductions were also prompted by a
firm's likelihood of becoming a boycott target and/or being subject to
environmental interest group lobbying for tighter regulatory standards.